Big changes ahead for eBay

Many retailers have begun offering their products on marketplaces such as eBay, as it enables them to extend their reach to new customers. However, the online auction site is slated to undergo a pretty radical change – eBay recently announced it would be splitting ways from parent company PayPal.

“Keeping eBay and PayPal together beyond 2015 clearly becomes less advantageous to each business strategically and competitively.”

“eBay and PayPal are two great businesses with leading global positions in commerce and payments,” said eBay president and CEO John Donahoe. “For more than a decade eBay and PayPal have mutually benefited from being part of one company, creating substantial shareholder value. However, a thorough strategic review with our board shows that keeping eBay and PayPal together beyond 2015 clearly becomes less advantageous to each business strategically and competitively.”

While the divorce between the two brands is a pretty significant event, it is one that many retail sector players believe will benefit sellers in the long run. There were a number of conflicts of interest that existed previously, such as the reliance on PayPal as a payment medium. The split enables merchants to provide customers with new ways to purchase products and services, such as the recently announced Apple Pay solution.

Nowadays, there are so many online stores from which people could purchase goods. Inconveniences, no matter how small, can easily ruin sales. In the case of eBay, being able to simply pay with a credit card instead of having to sign up with PayPal may result in a surprising reduction of cart abandonment.